Dental insurance or cash pay

[anotherAlias]

I will officially be FIRE on 4/27 and am sorting through my insurance options.  I'm squared away with an ACA plan for medical coverage but I'm debating whether I need a dental plan.  My current employers plan is awesome and heavily subsidized by the company but it looks like open market plans are much more limited and expensive.  In the past 45 years I've only had 2 fillings so I'm considering just paying cash for cleanings and any other work.  Does that seem foolish?  What are/have you guys done for dental work?

[kanga1622]

We don’t have dental insurance even with plans available through our workplace. Our plans are just too expensive.  Cheapest plan is $85 a month and only covers $1000 per year per person.

We just cash pay our dentist visits. Our dentist gave us a 10% discount for paying for visit at time of service rather than billing us later. I’ll take that deal!

[SunnyDays]

I’ve paid cash since I retired.  Private insurance isn’t worth it.  I don’t get a discount though - everyone has to pay at every visit.

[Frankies Girl]

My dentist has a self pay program where you can pay up front for 2X cleanings and exams and xrays for a flat fee for 1 year coverage (not calendar, from day of pay). And it also give a 15% discount on any other procedures for the same time period.

I'm pretty sure there are many good dentists out there that offer some sort of similar programs or discounts for self pay.

If it turns out you may need extremely expensive dental work (like thousands), there's a good chance you could delay it until you can purchase ACA coverage if there is any benefit to doing so - like the ACA version would cover the majority of the cost. That was my plan unless it was emergency.

[terran]

Most times I've looked at (employer) dental insurance it has pretty low caps making it kind of the opposite of what insurance is good for (covering things you can't afford). With the employer covering half the cost it still ends up being about the same as paying for 2 cleanings/year for each of us so we get a little extra coverage for "free" and we don't pay taxes on the income without having to dip into our HSA so we sign up for it, but it's not a good deal if you include the full cost. I'd probably do the same when we don't have employer coverage: compare the cost to the expected cleanings and if it's close buy the insurance and otherwise not unless I thought there was a high likelihood of using the other benefits.

[nirodha]

Don't most dental plans carry a $1000 or $1500 per year limit?

For my dentist, the best option was an insurer where he is a preferred provider. We have $1000/head coverage, $50 deductible, for ~$30 per month, per person. The negotiated rates are substantially cheaper than his cash prices - 1/3 to 1/2.

This was the same carrier as my prior employer insurance, so we could draw upon real life pricing experience.

I called to confirm - Not only was his membership plan was more expensive than the dental policy, it only provided a 10% discount against the retail rates.


It's possible I could have shopped around for a cash dentist with better rates, but I'm not picking my dentist on price.

[Goldendog777]

Check with your current insurer to see if you can buy a plan directly from them.  I had MetLife through my work and purchased a plan directly from them called MetLife take-along dental.  Because I had continuous coverage with them, they waived the waiting period on work like fillings, crowns and root canals that most new insurance companies impose.  We get  2 cleanings and 1 check-up annually.  I think they cover fillings at 80% and crowns/root canals at 50%.  If you are one prone to having those issues, it’s worth it.  If you generally don’t need major dental, it’s probably better to just cash pay. 

[anotherAlias]

I dug out my last receipt to find out what my dentist charges for cleaning and exams.  I ran the numbers with the best looking policy and my current carrier's individual policy.  My current carrier is a complete joke and would wind up being more expensive than paying cash unless I needed a ton of work.  The other policy looks promising.  For a standard years care of 2 cleanings and an exam, I would essentially get one cleaning for free after factoring in premiums and deductible.  If I needed a filling, it would pay 50%.  I'm thinking that is what I will go with.  It is only ~$17/mo and I wouldn't have to worry about the waiting periods that all the policies seem to have for major work if I ended up with something serious. 

[frugalnacho]

I just pay for a plan directly with my dentist.  I think it's $249/yr and comes with 2 cleanings and a set of xrays, and then I pay 30% less than the list price for any needed procedures.  This works out to be cheaper than paying cash for those services.   I think additional family members are $179/yr.  I've had to have a couple cavities filled since we switched over to this plan, but it still works out cheaper than paying for my employer insurance (which is nuts because my employer also pays a huge portion).  The last several employer sponsored dental plans just didn't make any sense because you'd need to utilize a lot of the insurance to come out ahead vs self insuring, and if you utilize too much then you still don't come out ahead because of their limited payout.  Only in some narrow range of near catastrophic dental injuries would I have come out ahead with the insurance. 

Dental insurance seems like a scam to get you to pay triple price for standard cleanings, and barely save you anything if you actually need work done.  At least if it's just 1 or 2 people.  All my dental plans have had rates for just me, and a second rate for me + unlimited family members.  Makes no sense to me why I should pay the same insurance premiums, for just me and my wife, as a family of 6.  Now that I have a child just coming to the age of needing dental care the equation is more balanced out and it's a wash whether I buy the plans from my dentist or get the insurance.  Once the second kid needs dental care it will be cheaper for me to sign up for my employers dental plan. 

[jpdx]

One thing to consider, if you are self-employed dental insurance is tax deductible. This reduces AGI which may allow you to receive larger tax credits. If you pay the dentist out of pocket, these costs are not usually deductible.

[secondcor521]

One thing to consider, if you are self-employed dental insurance is tax deductible. This reduces AGI which may allow you to receive larger tax credits. If you pay the dentist out of pocket, these costs are not usually deductible.

Good point.  At the federal level, yes, but subject to a 7.5% of AGI floor, which means for most people the practical federal tax benefit is pretty much $0.  In my state, it's an additional subtraction, so I would save 6.925% of every dental premium dollar.  I still just do cash pay and take the 10% discount or whatever it is.  My dentist takes credit cards, so I could probably get airline miles or cash back, which would be maybe 2% of the bill (tax free).

[RedmondStash]

I've never found private dental insurance to be worthwhile. We just pay cash when we're not working and don't have employer-sponsored dental insurance. It's worked fine for us.

I figure we can handle unexpected dental costs (potentially in the single-digit thousands) much more easily than we could handle unexpected medical costs (potentially in the tens or hundreds of thousands, or even higher). So the risk seems way more manageable for going without dental insurance than going without health insurance.

Interesting, the idea of asking your dentist if they have a private plan directly with them. I might check into that with mine.

[nirodha]

I just pay for a plan directly with my dentist.  I think it's $249/yr and comes with 2 cleanings and a set of xrays, and then I pay 30% less than the list price for any needed procedures.  This works out to be cheaper than paying cash for those services.   I think additional family members are $179/yr. 

In comparison - my dentist charges $500 per person for their plan. Same benefits, but only a 10% discount on list.

They are in a wealthy area, where people can afford to pay. They do 3D dental imaging. Have a laser drill. 3D print crowns on site. All the cool stuff that goes into a modern dental experience.

Insurance is a great deal in their case.

[phildonnia]

My wife and I were just having this discussion today. 

The very fact of not having insurance scares people.  And the pleasant feeling of having your expenses covered (or mostly covered) is something many people are willing to pay for.  But keep separate the notions of "insurance" and "managed care."

Insurance is about managing risk.  Dental cleanings, X-rays, and even fillings are not a risk.  They are a certainty.  If you pay for them through an insurance plan, you are guaranteed to pay more, (for the simple reason that you are paying more people to do their jobs for you). 

Insurance is for things that you cannot afford to pay for ever.  What dental risks are you envisioning?  Imagine the worst possible dental problem that you could face.  Orthodontics will cost several thousand dollars.  Implants or facial surgery can be up to ten thousand. Now, you shouldn't like to pay so much, but if the remote possibility of a ten thousand dollar expense will ruin your life and your plans, then you probably aren't ready to FIRE anyway. 

With medical insurance, this makes sense.  You could get cancer or end up in the ICU for six months.  On average you will pay more, but the average is at least not disastrous.  I'm having trouble imagining an equivalent in dental though.

As far as routine expenses, you generally get two things: First, the insurance company does all the arguing about prices (and medical necessity) for you -- and they have more to bargain with (thousands of subscribers, instead of just one).  And second, you don't have the hassle of actually arranging the payment. 

On that last point, my own experience is that I very often end up calling insurance companies and providers anyway; waiting on hold; and then doing the negotiating between them that they should be handling on their own.  So I don't get much value there.  (My medical plan, on the other hand, is awesome: I just show up, get my medical care, and never ever see a bill or even know the price).

Why do I even have a dental plan?  Because I'm not yet FIREd, and my employer paritally pays for it.  After FIRE, I plan to have very high-deductible medical insurance, and probably no dental.  I will probably continue to have collision insurance on my vehicles because I appreciate the convenience and I'm willing to pay statistically slightly more for it.

[jpdx]

One thing to consider, if you are self-employed dental insurance is tax deductible. This reduces AGI which may allow you to receive larger tax credits. If you pay the dentist out of pocket, these costs are not usually deductible.

Good point.  At the federal level, yes, but subject to a 7.5% of AGI floor, which means for most people the practical federal tax benefit is pretty much $0.  In my state, it's an additional subtraction, so I would save 6.925% of every dental premium dollar.  I still just do cash pay and take the 10% discount or whatever it is.  My dentist takes credit cards, so I could probably get airline miles or cash back, which would be maybe 2% of the bill (tax free).

The deduction is not subject to the 7.5% AGI floor. You're possibly thinking of the itemized deduction for medical expenses. Self-employed health insurance premiums -- including dental -- are deductible above the line.

Since this reduces AGI it can tip the scale to making dental insurance worthwhile, especially if you use ACA marketplace.

[ltt]

I will officially be FIRE on 4/27 and am sorting through my insurance options.  I'm squared away with an ACA plan for medical coverage but I'm debating whether I need a dental plan.  My current employers plan is awesome and heavily subsidized by the company but it looks like open market plans are much more limited and expensive.  In the past 45 years I've only had 2 fillings so I'm considering just paying cash for cleanings and any other work.  Does that seem foolish?  What are/have you guys done for dental work?

It's tough to say for dental.  We decided to purchase a plan as our dental recently ended.  We debated about ACA dental plans, and there is a waiting period for any work that needs to be done.  As we had already had a dental plan through husband's employer, I called them directly to see about a plan--the plans were pretty much the same as the ACA, but not as good as my husband's former employer's plan.  They were willing to waive the waiting period.  We were able to do a mix and match plan--meaning my husband and I are on one, our older daughter is on another, and our teen is on her own plan.  It is a little over $100 per month.

You will also want to check with your dental office in regards to what insurance plans your dentist takes.

Cleanings run around $150 at the dentist without insurance.  Unfortunately, as my husband and I have gotten older, we've had more extensive dental work, including an implant, two or three crowns, and I, myself, ended up having two root canals last year. 

We decided to get a plan for this year and see how it works out.  If it's simply not working for us, then we can always just go to paying cash.

[Fishindude]

I’ve paid cash since I retired.  Private insurance isn’t worth it.  I don’t get a discount though - everyone has to pay at every visit.

This is what we do too.   Not a big deal to pay to get teeth cleaned and checked a couple times per year.
To date, we've not needed anything major, but if we do, we'll just pay out of pocket.

[rmorris50]

As we get ready to fire, I’ve also wondered about dental. My new dentist also has a nice plan that offers reduced costs for most known dental work. I’ll prob go with that vs getting ACA dental insurance.


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[bmjohnson35]

When I informed our provider that I would be losing my dental coverage, he offered to continue to charge me the negotiated insurance rates (usual customary rates).  Our insurance coverage was supposed to be better than average.  Of course, you lose the insurance covered cost benefits, but at least you get a better rate per service.  It is my understanding that the cash pay rate is just as good or better than insurance negotiated rates at some dentist (there is no consistency).  When you discuss this with your dentist, don't state that you are retiring, simply state that you may be losing your coverage. Ask them how their cash costs compare to your insurance costs?

[Michael in ABQ]

I don't understand why medical and dental providers don't provide a larger discount for paying cash. Rarely do I see a provider getting more than 50% of the face rate they bill at. Plus the have to employ a whole staff of people to do that billing and paperwork - and provide office space for them to operate out of, and have a manager to oversee it all. But if you don't have insurance and are willing to pay cash at the time of service they still want to charger $100+ for something no insurance company will give them more than $50-75 for plus the huge amount of overhead that goes into getting that money out of insurance companies.

[Fomerly known as something]

Have not had dental insurance ever.

[ericrugiero]

As phildonia said, insurance costs you more money (on average) to reduce the risk of extreme high cost events.  For dental insurance the most expensive potential cost should be $10,000 or maybe $20,000.  If you can FIRE, you can afford that.  Also, that high cost event can be reduced by doing medical tourism and having the procedure done in a cheaper location. 

I do have dental insurance because my employer subsidizes the cost making it cheaper.  But, it has a cap on what they will pay so I'm actually uninsured for the true high cost events.  If I ever FIRE, I don't plan to have dental insurance. 

[RedmondStash]

I don't understand why medical and dental providers don't provide a larger discount for paying cash. Rarely do I see a provider getting more than 50% of the face rate they bill at. Plus the have to employ a whole staff of people to do that billing and paperwork - and provide office space for them to operate out of, and have a manager to oversee it all. But if you don't have insurance and are willing to pay cash at the time of service they still want to charger $100+ for something no insurance company will give them more than $50-75 for plus the huge amount of overhead that goes into getting that money out of insurance companies.

This is a good point. I know other medical providers who offer a substantial discount for cash payments. Our dentist offers only a very small discount. I've never asked why, but it's clear that dentists don't expect to be paid the rates they bill the insurance companies.

I do have dental insurance because my employer subsidizes the cost making it cheaper.  But, it has a cap on what they will pay so I'm actually uninsured for the true high cost events.

Another good point. I've always found even good dental insurance to be very limited, so you end up paying a big chunk of any big bills out of pocket anyway. Another reason I don't bother with dental insurance.

[Metalcat]

I don't understand why medical and dental providers don't provide a larger discount for paying cash. Rarely do I see a provider getting more than 50% of the face rate they bill at. Plus the have to employ a whole staff of people to do that billing and paperwork - and provide office space for them to operate out of, and have a manager to oversee it all. But if you don't have insurance and are willing to pay cash at the time of service they still want to charger $100+ for something no insurance company will give them more than $50-75 for plus the huge amount of overhead that goes into getting that money out of insurance companies.

This is a good point. I know other medical providers who offer a substantial discount for cash payments. Our dentist offers only a very small discount. I've never asked why, but it's clear that dentists don't expect to be paid the rates they bill the insurance companies.

I do have dental insurance because my employer subsidizes the cost making it cheaper.  But, it has a cap on what they will pay so I'm actually uninsured for the true high cost events.

Another good point. I've always found even good dental insurance to be very limited, so you end up paying a big chunk of any big bills out of pocket anyway. Another reason I don't bother with dental insurance.

Every American dentist I know who subscribes to insurance programs hates having reduced insurance rates forced on them. They all dream of becoming fee-for-service dentists, where everyone gets the same price and if your insurance pays less, then you pay the difference.